Fumo addresses "secret payment" in court

February 10, 2009 3:38:15 PM PST
Former state Sen. Vincent Fumo, testifying in his federal corruption trial Tuesday, defended a utility company's secret $17 million gift to a charity run by his aides, saying he didn't want others pestering the company for similar donations. Fumo, the long-powerful Philadelphia Democrat, told jurors he remains proud of the electricity deregulation deal he brokered with Peco Energy in the late 1990s, which spawned the gift but also rate cuts and a decade-long rate freeze.

Fumo said that no state rule required him to disclose the gift, which sent $17 million in Peco funds to the Citizens' Alliance for Better Neighborhoods, a group that cleaned streets and did economic development work in Fumo's district. Prosecutors allege the 65-year-old Fumo plundered more than $1 million from the group, using its vehicles, credit cards and staff to further his lavish lifestyle.

Fumo told jurors the Peco gift was kept secret only so that other groups and lawmakers did not pester Peco for similar funding.

"If it's known that they're giving out that kind of money to anybody, then everybody is going to besiege them," Fumo testified. "It could cost them billions."

He also said disclosure would have offended Peco's Republican allies in the state Senate.

Fumo, 65, appeared more at ease on his second day on the witness stand, weaving in political accomplishments and brushes with the famous and infamous - including the late Kenneth Lay, founder of Enron. He methodically, if dryly, answered questions from lawyer Dennis Cogan as he responded to a laundry list of allegations raised by government witnesses over the past four months.

The fireworks could come later in the week when Fumo is cross-examined by a federal prosecutor who, with colleagues and the FBI, has been investigating Fumo for five years.

Much of the case revolves around Fumo's alleged personal use of resources that belonged to the state, the charity and a maritime museum, from heavy equipment and yacht trips to free labor and laptop computers.

Responding to the last charge, Fumo acknowledged that he should not have given his then-girlfriend a Senate laptop. But he said his young daughter used a Senate computer at home because he had the enviable task of trying out new equipment he was considering for the office.

"In trying to use the latest technology, and before we would give it to anybody, I would get it and try to make it work," Fumo said.

Fumo served 30 years in the state Senate, most of them as a ranking member of the powerful Senate Appropriations Committee. He told jurors this week he considers it crucial to amass power to be an effective legislator.

For instance, he said that consumer groups that had tried to negotiate rate cuts with Peco were merely "tilting at windmills."

"We were the ones that gave these constituent groups any kind of clout, any kind of power with Peco. (Peco) had been steamrolling over them for years," Fumo testified Tuesday.

A multimillionaire banker and lawyer, Fumo has twice beaten criminal charges. He faced vote-fraud charges that authorities dropped in 1973, and a 1980 conviction in an alleged ghost-worker scheme was later overturned.

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